The US Supreme Court's recent ruling on Donald Trump's tariffs has opened up a potential $175bn refund pot, with hundreds of thousands of businesses across the US scrambling for advice on how to secure their share. According to Joseph Spraragen, a seasoned New York-based attorney, the demand for trade lawyers has reached unprecedented levels.
Spraragen's firm, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt (GDLSK), has spent months filing hundreds of lawsuits for clients, including luxury brands Prada and Dolce & Gabbana, in protest of the US president's decision to impose sweeping import taxes last April. The ruling, which deemed Trump's tariffs illegal, has sent businesses like FedEx, L'Oreal, and Dyson rushing to sue for refunds.
As reported by The Guardian, this wave of demand is expected to result in a mini-gold rush for trade lawyers, with fees for delivering refunds, paydays for hedge funds buying up rights to businesses' refunds, and a cut for AI firms trying to get in on the action. However, it remains to be seen how much of that money will ultimately filter through to American consumers, who shouldered tariff costs through widespread price hikes.
Law Firms and Tariff Refunds
Jennifer Hillman, a law professor at Georgetown University and former general counsel for the US trade representative office, believes that the only winners from this trade war have been the lawyers. The complications of Trump's tariffs, which resulted in different rates being charged based on where certain parts of a product were manufactured, have put trade lawyers into overdrive.
Compliance costs have shot through the roof, with Trump's tariffs estimated to have cost businesses billions of dollars in extra administrative work. Law firms like Quinn Emanuel Urquhart & Sullivan have quickly publicized the launch of their own "Tariff Refund Task Force", promising to pursue refunds aggressively for business clients.
Nicole Bivens Collinson, head of international trade at law firm Sandler Travis and Rosenberg, notes that some firms are advertising "flat fees" to get cases filed in court, which could cost businesses $10,000-$15,000 a pop. If courts request extra documentation or the Trump administration drags out the process, billable hours will start to rack up.
Hedge Funds and Tariff Refund Trades
Hedge funds are swooping in to buy up rights to tariff refunds, with firms like Jefferies, Oppenheimer, and Seaport Global Securities reportedly brokering deals. Richard O'Neill, a partner in the Seattle office of customs and trade law firm Neville Peterson, notes that hedge funds have been looking to scoop up these claims since before the Supreme Court ruling.
One Atlanta-based toymaker, Kids2, recently sold off the rights to its $15m tariff claim to a Boston hedge fund for $2m up front. Stephan Becker, the leader of the international trade practice group at law firm Pillsbury, advises businesses to carefully consider whether selling a portion of their claim or all of it in exchange for quick cash makes sense, given the uncertainty surrounding the refund process.
AI Firms and Tariff Refund Processing
AI firms are also rumored to be muscling in, offering to process people's applications in exchange for cuts of any future refunds. Hillman explains that these firms are saying, "I'll do all the work for you, but then I get 20%." However, there are concerns about opportunists in the legal sector, with less experienced lawyers willing to take on claims despite having little previous history in trade or customs law.
O'Neill advises businesses to go with a law firm that actually litigates these issues to ensure they get the best counsel available. For now, those with experience are trying to keep their heads above water, with Washington-based trade lawyer Brian Janovitz fielding a non-stop wave of calls and emails from clients since the ruling.
Conclusion and Future Implications
Ultimately, any complaints about legal fees should be aimed at the Trump administration, Hillman says. The question remains whether companies who end up successfully securing refunds will pass on any of those returns to consumers, barring any legal orders. Whether any companies will be pressured into lowering their prices or providing something like a "tariff rebate day" remains to be seen.
